RIYADH: The amount of renewable energy coming to the international market falls short of fulfilling the rising demand, according to Saudi Arabian Oil Co.’s CEO.
Speaking on a panel at the Saudi Green Initiative Forum on the sidelines of the 2023 UN Climate Change Conference, Amin Nasser highlighted that more investments are needed in the oil and gas sector to ensure a smooth energy transition.
“Even with all the renewable coming to the market, it is still not enough to handle the additional demand we are seeing,” said Nasser.
He added: “If you compare the investments in the energy sector, it was around $740 billion. Right now, we are doing 40 percent below that at around $500 billion. Considering the higher demand we are anticipating in the future, I think we need more investments.”
Patrick Pouyanné, CEO of TotalEnergies, who was also present on the panel, said that investments in the energy sector are rising, but the industry should learn how to split investments between renewables and hydrocarbons.
“Investments in the energy sector are growing. The question is, how do we split these investments? Because we want to triple renewables, and at the same time, we need to maintain the production of oil and gas, which is the energy of today. Let us do more investments in the energy sector, but in an orderly manner,” said Pouyanné.
During the talk, Nasser highlighted that the demand for clean energies like green hydrogen remains low due to its high associated costs.
Regarding the world’s energy divide based on socio-economic characteristics, Nasser said: “Today, 60 percent of what we produce goes to the global south, and 40 percent goes to the global north. By 2050, almost 70 percent will go to the Global South, and in hydrocarbons, 80 percent will be going to the Global South.”
Nasser added: “We need to take care of all stakeholders in terms of making sure that we provide affordable, sustainable, and secure energy for the whole world.”
The Aramco chief further noted that Saudi Aramco is one of the energy companies in the world that has made significant strides in ensuring sustainability in its operations.
According to Nasser, today, Saudi Aramco has the lowest average methane intensity and CO2 intensity per barrel of oil globally. He went on to add that Saudi Aramco will continue to drive it down, reiterating that they have made the commitment to zero methane by 2030. Furthermore, Nasser informed that they are building the carbon capture and storage and they are also getting into e-fuels.
Last year, Saudi Aramco partnered with the Kingdom’s Ministry of Energy to establish a carbon capture and storage hub in the region.
Following the launch, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the hub will have a storage capacity of up to 9 million tons of carbon dioxide annually by 2027.